Patterson-UTI Floats $418M of New Stock to Pay Off SSE’s Debts
As MDN told you in November, Patterson-UTI Energy, an oilfield services company with major operations in the northeast, is buying out and merging in Seventy Seven Energy (SSE) in an all-stock deal worth $1.76 billion (see Seventy Seven Energy Throws in the Towel, Sells to Paterson-UTI). SSE is the former Chesapeake Oilfield Operating company, the oilfield services subsidiary of Chesapeake Energy that Chessy spun out into its own company in July 2014 after it couldn’t find anyone to buy it (see Long Labor & Delivery: Seventy Seven Energy Born Yesterday). It was an ill-fated venture from the beginning. SSE never turned a profit after becoming its own company. In June of this year, SSE, which has major operations in the Marcellus/Utica, filed for bankruptcy, then emerged from bankruptcy two months later borrowing $100 million (see Seventy Seven Energy Pops Out of Chapter 11 Bankruptcy in 2 Mos.). In the third quarter of this year, the red ink continued to flow, with SSE losing $36.5 million. Now that Patterson is buying it, they are on the hook for SSE’s debts. So even though the deal to buy SSE is a no-cash stock swap, Patterson still needs a boatload of cash to pay off SSE’s debts. So Patterson is floating 15,800,000 shares of stock at $26.45 per share to raise $418 million. The stated reason? “To fund the repayment of the outstanding indebtedness of Seventy Seven Energy Inc.”…
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A Cleveland, OH-based natural gas utility company, Gas Natural Inc., has sold itself to investment firm First Reserve Energy. Gas Natural sells 21 billion cubic feet (Bcf) of natural gas to roughly 68,600 customers through regulated utilities operating in Montana, Ohio, Maine and North Carolina. Gas Natural’s other operations include an intrastate pipeline, natural gas production and natural gas marketing. First Reserve Energy is an investment firm focused solely on investing in (and buying) energy companies. Shareholders for Gas Natural voted at the end of December to approve the buyout/merger…
In May, U.S.-based oilfield services company FMC Technologies announced they will merge with their much larger quasi-competitor, France-based Technip, in an all-stock deal that will create a new company called TechnipFMC worth $13 billion (see 
In October EQT announced a deal to buy Trans Energy, Inc., a public pure-play driller in the Marcellus in West Virginia, which will become a wholly-owned subsidiary of EQT (see 
A kerfuffle erupted yesterday when Chapter IV Investors, a Charlotte, NC-based investment firm with investments in EQT, Range Resources and Antero Resources, announced it had sent a letter to EQT urging the company to consider merging with either Range Resources or Antero Resources. Chapter IV, which is essentially two big-money investors (W. Barnes Hauptfuhrer, Managing Partner and Portfolio Manager, and Ryan J. Jack, Partner), does not own enough stock in any of the companies (less than 1% in each) to throw its weight around like a corporate raider. Rather, it appears to be two investors attempting to grab the attention of these companies and their shareholders by issuing a press release (full copy below) with a plan they say would create a new Marcellus/Utica driller worth more than $25 billion. Obviously the value of investments for Chapter IV would go up under such a scenario–so there is self-interest at work here. However, we don’t detect any kind of bullying on the part of Chapter IV, like that of a raider Carl Icahn (successful takeover of Chesapeake Energy & Cheniere Energy) or Keith “Mini-Me” Meister (unsuccessful attempt to takeover Williams). Rather, it appears to be a couple of investors who believe there is an honest and good case for a combination of EQT with another company, and were willing to spend $500 on a press release to make their case. Are they right?…
Seventy Seven Energy (SSE) is the former Chesapeake Oilfield Operating company, the oilfield services subsidiary of Chesapeake Energy that Chessy spun out into its own company in July 2014 after it couldn’t find anyone to buy it (see 
Extreme Plastics Plus (EPP) has been manufacturing and installing well pad liners since 2007. Pad liners protect the ground from accidental spills of frack wastewater and chemicals used during the drilling process. Located in Fairmont, WV, EPP’s customers are in the Marcellus and Utica Shale region. In order to expand, EPP raised an undisclosed amount of investment money from Hastings Equity Partners in 2013 (see 
Word has leaked out that WGL Holdings, the umbrella company that owns Washington (DC) Gas Light Company and WGL Midstream, is considering selling itself to utility giant (and Spanish-based) Iberdrola. The deal, if it happens, has implications for the Marcellus. Earlier this month MDN reported that WGL Midstream, which already is a 7% owner in the Mountain Valley Pipeline project, had upped its ownership stake to 10% (see 
Not even a year go–in December of last year–one of the biggest and brightest stars in the midstream firmament for the Marcellus/Utica, MarkWest Energy, sold itself to Marathon Petroleum (see 